Highlights of this Issue

Supreme Court gives control over services in Delhi to Delhi government

The Supreme Court ruled that the legislative and executive power over the officers of IAS and Joint Cadre Services in Delhi government shall lie with the Delhi government.  

Ordinance to amend the Government of NCT of Delhi Act promulgated

The Delhi Legislative Assembly will not have the power to legislate on the subject of ‘services’.  Transfers and postings will be decided by a three-member committee, two of whom are appointed by the central government.

GDP grew by 6.1% in the fourth quarter of 2022-23

GDP for 2022-23 is estimated to grow by 7.2% in 2022-23 as compared to 9.1% in 2021-22.  This is marginally higher than the GDP growth of 7% as estimated in the Second Advance Estimates. 

RBI withdraws Rs 2,000 denomination banknotes from circulation

Rs 2,000 denomination banknotes will continue to be legal tender.   People may deposit such banknotes in their bank accounts or exchange them into banknotes of other denominations by September 30, 2023.

Industrial production grew by 4% in the fourth quarter of 2022-23

The Index of Industrial Production (IIP) grew by 4% in the fourth quarter, compared to an increase of 1.8% in the corresponding quarter of 2021-22.  In the third quarter of 2022-23, IIP had increased by 2.8%.

SC holds that the legislature party acts on the direction of the political party

The Supreme Court gave its verdict over the party split and disqualification of Maharashtra MLAs.  It ruled that the political party, not the legislature party, appoints the whip and leader of the party in the House.

Cabinet approves PLI scheme for IT hardware

The Union Cabinet approved PLI Scheme 2.0 for IT hardware.  The estimated expenditure under the scheme is Rs 17,000 crore over six years, and expected investment is Rs 2,430 crore. 

Accessibility standards for healthcare facilities notified

The standards prescribe requirements for hospitals and other healthcare facilities, for inpatient and outpatient facilities and medical equipment.

CEA notifies National Electricity Plan for 2022-32

Target capacity addition for 2017-2022 could not be achieved mainly due to the COVID-19 pandemic. Additional coal capacity required till 2031-32 may vary from 19,000 MW to 27,000 MW.    

Amendments to Green Energy Open Access Rules notified

The amendments redefine eligibility criteria for consumers eligible for the open access framework and exempts offshore wind projects from cross-subsidy and additional surcharge.

Fertiliser subsidy rates revised: Rs 38,000 crore will be provided for Kharif 2023

The Union Budget estimated fertiliser subsidy expenditure at Rs 1,75,100 crore in 2023-24.  Cabinet approved revised rates will apply between January-March 2023 for Rabi and April-September 2023 for Kharif crops. 

Amendments to Cigarettes and Other Tobacco Products Rules, 2004 notified

The amendments require publishers of curated online streaming content to incorporate anti-tobacco advertising in case of content that features consumption of tobacco products.

 

Macroeconomic Development

Tushar Chakrabarty (tushar@prsindia.org)

GDP grew by 6.1% in fourth quarter of 2022-23

Gross Domestic Product (GDP) (at constant 2011-12 prices) grew by 6.1% in the fourth quarter (January-March) of 2022-23 as compared to 4% in the corresponding quarter of 2021-22.[1]  

In the third quarter (October-December) of 2022-23, GDP had increased by 4.5%.  GDP for 2022-23 is estimated to grow by 7.2% in 2022-23 as compared to 9.1% in 2021-22.  This is marginally higher than the GDP growth of 7% as estimated in the Second Advance Estimates for 2022-23.[2]

Figure 1: Growth in GDP (%, year-on-year)

Sources: Ministry of Statistics and Programme Implementation; PRS. 

GDP across economic sectors is measured in terms of Gross Value Added (GVA).  In the fourth quarter of 2022-23, construction is estimated to grow by 10.4%, followed by trade at 9.1% and financial, real estate and professional services at 7.1%.

Table 1: Growth in GVA across sectors at constant prices (%, year-on-year)

Sector	Q4 2021-22	Q3 2022-23	Q4 2022-23
Agriculture	4.1%	4.7%	5.5%
Mining	2.3%	4.1%	4.3%
Manufacturing	0.6%	-1.4%	4.5%
Electricity	6.7%	8.2%	6.9%
Construction	4.9%	8.3%	10.4%
Trade	5.0%	9.6%	9.1%
Financial services	4.6%	5.7%	7.1%
Public Administration	5.2%	2.0%	3.1%
GVA	3.9%	4.7%	6.5%
GDP	4.0%	4.5%	6.1%

Note: GVA is GDP without taxes and subsidies.
Sources: Ministry of Statistics and Programme Implementation; PRS.

Industrial production grew by 4% in the fourth quarter of 2022-23

The Index of Industrial Production (IIP) grew by 4% in the fourth quarter (January-March) of 2022-23, compared to an increase of 1.8% in the corresponding quarter in 2021-22.[3]^,[4]  In the third quarter (October-December) of 2022-23, IIP had increased by 2.8%.  

Mining increased by 6.8% in the fourth quarter of 2022-23, as compared to 3.8% in the fourth quarter of 2021-22.  Manufacturing increased by 3.3% in the fourth quarter of 2022-23, while electricity increased by 6%.

Figure 2: Growth in IIP (%, year-on-year)
 
Note: Figures for March 2023 are quick estimates.
Sources: Ministry of Statistics and Programme Implementation; PRS. 

 

Home Affairs

Alaya Purewal (alaya@prsindia.org)

Supreme Court’s gives control over services in Delhi to the Delhi government

On May 11 2023, the Supreme Court gave its verdict on the control of the services between the central government and the Government of the National Capital Territory of Delhi (GNCTD).[5]  The question before the Court was whether the GNCTD (headed by the Chief Minister) or the Lieutenant Governor (acting on behalf of the central government) would have control over services and civil servants in Delhi.  The Court ruled that GNCTD will have control over civil services in Delhi, barring the subjects of police, public order and land, over which the central government has executive competence. 

The Court noted that there was no homogeneous class of union territories with similar governance structures.  By virtue of Article 239AA of the Constitution, Delhi has a legislative assembly with the power to legislate over subjects in the State List and Concurrent List.[6]  Such powers do not extend to subjects related to police, public order and land.  The executive powers of GNCTD are co-extensive with the Assembly’s legislative powers.  According to Entry 41 of the List II of the Seventh Schedule, services are a state subject, and hence GNCTD will have executive powers over all civil services, barring the three areas out of their purview.[7]  The Court also noted that as per Article 239AA (3), Parliament has the power to legislate over all matters in the State and Concurrent Lists with respect to GNCTD.  

Ordinance to amend the Government of NCT of Delhi Act promulgated

After the Supreme Court judgement on control over services in Delhi, the Government of National Capital Territory (Amendment) Ordinance, 2023, was promulgated on May 19, 2023.[8]  The Government of National Capital Territory of Delhi Act, 1991 provides the framework for the functioning of the Legislative Assembly and the government of Delhi. [9]  Key features include:  

• Powers to legislate over services:  As per Article 239AA of the Constitution, the Delhi Legislative Assembly has powers to make laws on subjects in the State List and the Concurrent List, barring: (i) police, (ii) public order, and (iii) land.   Parliament may also legislate on subjects under the State List with respect to Delhi, and these laws will prevail in case of repugnancy with state laws.  The Ordinance specifies that the Delhi Legislative Assembly will not have the power to legislate on the subject of ‘services’, which comes under the State List.   Services include matters related to appointments and transfers of employees of the Delhi government, and vigilance.

• National Capital Civil Services Authority:   The Ordinance establishes the National Capital Civil Services Authority to recommend to the Lieutenant Governor of Delhi (LG): (i) transfers and postings, (ii) matters related to vigilance, (iii) disciplinary proceedings, and (iv) prosecution sanctions of Group A of All India Services (except Indian Police Service), and Delhi, Andaman and Nicobar, Lakshadweep, Daman and Diu, and Dadra and Nagar Haveli (Civil) Services.

• The Authority will consist of the: (i) Chief Minister of Delhi as Chairperson, (ii) Principal Home Secretary of the Delhi government as Member Secretary, and (iii) Chief Secretary of the Delhi government as member.  The central government will appoint both the Principal Secretary and Chief Secretary.   Officers serving in connection with the subjects of police, public order, and land will not come under the Authority’s purview.  All decisions of the Authority will be based on a majority vote of the members present and voting.  The quorum for a meeting is two people.

• Powers of the Lieutenant Governor:  Under the Act, matters where the LG may act on his discretion are: (i) matters outside the legislative competence of the Delhi Legislative Assembly but which have been delegated to the LG, or (ii) where he is required by a law to act in his discretion or exercise any judicial or quasi-judicial functions.  The Ordinance specifies that in these matters, the LG will act in his sole discretion.  It expands the discretionary role of the LG by giving him powers to approve the recommendations of the Authority, or return them for reconsideration.  The LG’s decision will be final in the case of a difference of opinion between him and the Authority.

For a PRS summary of the Ordinance, see here.

 

Legislature

Alaya Purewal (alaya@prsindia.org)

Supreme Court holds that the legislature party acts on the direction of political party 

The Supreme Court gave its verdict over the split in a political party and consequent disqualification of MLAs in Maharashtra.[10]  The Court was examining whether a faction of the legislature party could declare itself the real political party based on in-house majority.  Further, if the faction’s rebellion would result in the disqualification of the concerned MLAs.  The Supreme Court ruled that the political party, not the legislature party, appoints the whip and the leader of the party in the House.  Therefore, the political party has the power to issue directions to all party MLAs in the Assembly, and these directions would be binding.

According to the Tenth Schedule, the original political party, in relation to the House, refers to the political party to which a member of the legislature party originally belongs or was elected as a representative.[11]   The Court clarified that the Tenth Schedule, the Representation of the People Act, 1951, and the Maharashtra Legislative Assembly (Disqualification on Ground of Defection) Rules, 1986 all indicate that the legislature party acts on the direction of the political party.11^,[12],[13]  The Court also stated that the direction to vote in a particular manner is issued by the political party, not the legislature party.  Further, it ruled that the Supreme Court cannot ordinarily adjudicate petitions for the disqualification of MLAs.  Such powers rest with the Speaker.    
 

Finance

RBI withdraws Rs 2,000 denomination banknotes from circulation

Tushar Chakrabarty (tushar@prsindia.org)

The Reserve Bank of India (RBI) has withdrawn Rs 2,000 denomination banknotes from circulation.[14]   However, such banknotes will continue to be legal tender.  The Rs 2,000 denomination banknote was introduced in November 2016 to expeditiously meet currency requirements in the backdrop of withdrawal of legal tender status of Rs 500 and Rs 1,000 denomination banknotes.  RBI noted that the objective of introducing the Rs 2,000 banknote was met once other denominations became available in adequate quantities.  It also observed that the banknote is not commonly used for transactions.  People may deposit such banknotes in their bank accounts or exchange them into banknotes of other denominations at any bank branch by September 30, 2023.  An amount of up to Rs 20,000 in Rs 2,000 banknotes can be exchanged at a time.

Ministry of Finance brings overseas spending through credit cards under liberalised remittance scheme

Tushar Chakrabarty (tushar@prsindia.org)

The Ministry of Finance notified the Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023 to amend the Foreign Exchange Management (Current Account Transactions) Rules, 2000.[15]^,[16]  The 2000 Rules provide that certain transactions in foreign exchange require prior approval of the Reserve Bank of India (RBI).   However, individuals can remit up to USD 2,50,000 in a financial year under the Liberalised Remittance Scheme (LRS).[17]   These include transactions for private visits to any country, gifts or donations, emigration, and studies abroad.   Any remittance above this limit would need the RBI’s approval.  Under the 2000 Rules, making payments abroad through international credit cards was exempt from the need to secure RBI’s prior approval.  

The 2023 Amendment removes this exemption.  By removing the exemption, all credit card transactions will be included in the LRS limit and will be subject to a tax collected at source of 20% from July 1, 2023.[18]  The Ministry of Finance clarified that spending up to seven lakh rupees in a financial year through international credit and debit cards will not attract any tax collected at source.[19] 

SEBI releases consultation paper on additional disclosures for Foreign Portfolio Investors

Pratinav Damani (pratinav@prsindia.org)

The Securities and Exchange Board of India (SEBI) released a consultation paper on the framework for mandating additional disclosures by certain high-risk Foreign Portfolio Investors (FPIs).[20]   SEBI noted that certain FPIs with highly concentrated portfolios may have beneficiaries (such as promoters) in contravention of norms on Minimum Public Shareholding (MPS) and Foreign Direct Investment.  Currently, the minimum public shareholding in India is 25% of the total equity.[21]  Specifically, the Foreign Direct Investment Policy of 2017 mandates that beneficiaries who are citizens of or located in a country sharing a land border with India can only invest in India through the government route.20   This Policy does not cover FPIs.

The key proposals in the consultation paper are.  

• Categories of FPIs:  FPIs will be segregated into low, moderate, and high-risk categories.  Low risk FPIs will include government and government related entities such as central banks and sovereign wealth funds.   Medium risk FPIs will include pension funds and retail funds with widespread and dispersed investor base.   Funds not defined as low or medium risk funds will be designated as high-risk funds.

• Disclosures:  Currently, Beneficial Owners must be identified under provisions of the SEBI (Foreign Portfolio Investors) Regulations, 2019.  These regulations have been framed in accordance with the Prevention of Money Laundering (Maintenance of Records) Rules, 2005.[22]  If an entity owns (or is entitled to capital or profits) 10% or more of companies or trusts (15% for partnerships), they are considered a Beneficial Owners.20  Individuals exercising ultimate control such as the right to appoint management are also considered Beneficial Owners.  Under the proposed framework, high risk funds (with more than 50% of their funds invested in a single corporate group) will have to provide complete ownership details (with granular details down to individuals) without any thresholds.

Comments are invited until June 20, 2023. 

SEBI issues consultation paper on review of expense ratios charged by asset management companies

Tushar Chakrabarty (tushar@prsindia.org)

The Securities and Exchange Board of India (SEBI) issued a consultation paper on review of total expense ratio charged by asset management companies (AMCs).[23]   Total expense ratio is charged by AMCs to investors of mutual funds for managing the fund.  Currently, mutual fund schemes are permitted to charge certain expenses in addition to the total expense ratio.  These include: (i) brokerage and transaction costs, (ii) GST on investment and advisory fees, and (iii) other additional expenses.  These additional expenses were allowed to facilitate the growth of the mutual fund industry.  However, SEBI noted that there is a need to review these charges given the significant growth of the industry.  It has proposed that the total expense ratio should include all expenses that could be charged from an investor.  Investors should not be charged any amount over and above the prescribed limit for total expense ratio.

Comments are invited until June 1, 2023.

SEBI issues draft regulations for suspicious trading activities in the securities market

Tushar Chakrabarty (tushar@prsindia.org)

The Securities and Exchange Board of India (SEBI) invited comments on the draft SEBI (Prohibition of Suspicious Trading Activities in the Securities Market) Regulations, 2023.[24]   SEBI observed that technology has enabled market participants to commit fraudulent activities while concealing the identities and connections between entities engaged in such activities.  In such cases, it becomes difficult to collect evidence to prove the exchange of unpublished price sensitive information between the parties.  To deal with such cases of unexplained suspicious trading pattern, SEBI has proposed a new regulatory framework.  Key features include:

• Unexplained suspicious trading activities: The draft regulations prohibit any person from engaging in unexplained suspicious trading activity.  Suspicious trading activity includes any trading activity which exhibits an unusual trading pattern in a security or a group of securities.  Unusual trading pattern would include repetitive trading pattern by a person or group of connected persons which: (i) involves a substantial change in risk taken in one or more securities over short periods of time, and (ii) delivers abnormal profits or averts abnormal losses.  Such trading pattern should involve use of material non-public information related to a security.  Material non-public information includes information about a company/security which was not generally available.  Once such information became generally available, it has a reasonable impact on the price of securities of the company.  Unexplained suspicious trading activity refers to suspicious trading activity for which no reasonable explanation could be provided.

• Duties of stock exchanges: Stock exchanges and other intermediaries must inform SEBI of any suspicious trading activity noticed by them.

• Investigation by SEBI: SEBI can initiate investigation into suspicious trading activity if it has reasonable grounds to suspect that any person or group of connected persons have engaged in such activity.  The persons charged with such activity will be given an opportunity to provide their rebuttal.  If SEBI is not satisfied with such rebuttal, it can take action under SEBI Act, 1992.

Comments are invited until June 2, 2023.

 

Urban Development 

Omir Kumar (omir@prsindia.org)

Cabinet approves scheme to make cities climate change resilient and promote circular economy 

The Union Cabinet approved the ‘City Investments to Innovate, Integrate and Sustain 2.0’ (CITIIS 2.0) for a period of four years (2023-2027).[25]  The program has been conceived by the Ministry of Housing and Urban Affairs in partnership with: (i) French Development Agency (AFD), (ii) Kreditanstalt für Wiederaufbau (KfW); a German bank, (iii) European Union (EU), and (iv) National Institute of Urban Affairs.  The financial outlay for CITIIS 2.0 will include a loan of Rs 1,760 crore from AFD and KfW, and a grant of Rs 106 crore from the EU.    

CITIIS, launched in 2018, is a sub-component of Smart Cities Mission in 12 select cities.[26]  It focused on building infrastructure related projects in cities, capacity building with states, and promoting integrated urban management at the national level.  Key aims of CITIIS 2.0 include: (i) providing financial and technical support in up to 18 smart cities (will be selected) for projects related to building climate resilience, and circular economy focusing on waste management, (ii) assisting states/ UTs (on demand basis) to facilitate climate data driven planning with necessary infrastructure and build capacities of urban local bodies, and (iii) assisting the centre, state, and city to integrate climate change governance in urban India.  CITIIS 2.0 seeks to supplement climate change commitments of India through National Mission on Sustainable Habitat, Atal Mission for Rejuvenation and Urban Transformation 2.0 (AMRUT), Swachh Bharat Mission 2.0 and Smart Cities Mission.  

 

Electronics and IT

Omir Kumar (omir@prsindia.org)

Cabinet approves PLI scheme for IT Hardware

The Union Cabinet approved the Production Linked Incentive (PLI) Scheme 2.0 for IT hardware for a period of six years.[27]  A PLI provides certain benefits to selected companies on incremental sale of products manufactured domestically.

The scheme will cover manufacturing of laptops, tablets, all-in-one PCs, servers, and ultra small form factor devices.  The estimated expenditure under the scheme is Rs 17,000 crore over six years.  The program is expected to lead to incremental investment of Rs 2,430 crore and creation of 75,000 jobs.

 

Communications

Omir Kumar (omir@prsindia.org)

TRAI releases recommendations on ease of doing business in the telecom and broadcasting sector 

The Telecom Regulatory Authority of India (TRAI) released ‘Recommendations on Ease of Doing Business in Telecom and Broadcasting Sector’.[28]^,[29]  Key recommendations include:   

• Clearances and approvals:  TRAI noted that currently the process of obtaining permissions, and making payments is complex and time consuming.  Concerned Ministries should set up a single window system for all clearances and approvals.   Each Ministry should specify stage-wise timelines for all the processes in the respective guidelines or policies.   Each Ministry should set up a standing Ease of Doing Business committee to review, simplify, and update processes in this regard.

• Infrastructure and essential services status:  Broadcasting and cable service sector should be granted ‘infrastructure status’.  This will enable the industry to raise capital from non-banking finance companies, insurance companies, pension funds and India Infrastructure Financing Company Limited.  Laying of submarine cables should be classified as ‘critical and essential services’.

• Testing of telecom products: To avoid duplication in the testing of telecom products, the Department of Telecommunications should constitute a standing committee.  The committee should include representation from the Ministry of Electronic and Information Technology, Department of Telecommunication (DoT), and Bureau of Indian Standards.

• Right of Way:   DoT has developed the GatiShakti portal to streamline the process for right of way approvals.  However, there is no provision for local cable operators (LCO) to take such approvals from the portal.  The portal should incorporate all service providers including LCOs.

• Website blocking:  TRAI noted that different ways/ portals are being used to send the list of websites to be blocked to internet service providers.   It recommended creating a single window portal for website blocking. The list of blocked websites should be sent to the internet service provider via the portal.

 

Power

National Electricity Plan notified for 2022-32

Omir Kumar (omir@prsindia.org)

The Central Electricity Authority (CEA) notified the National Electricity Plan (NEP) (Volume-I Generation) for 2022-32.[30]^,[31]  CEA is required to formulate a national electricity plan once in five years under the Electricity Act, 2003.[32]  The Plan provides a review of the last five years (2017- 22), capacity addition requirements for 2022-27, and projections for the period 2027-2032.  Key features of the plan are:

• Current installed capacity: As of March 31, 2022, India’s installed capacity was about four lakh megawatts.  Coal, renewable energy sources, and nuclear constitute 51%, 39%, and 2% of the installed capacity, respectively.

• Targets for 2017-22 not met:  Target capacity addition for 2017-2022 could not be achieved mainly due to the COVID-19 pandemic.  Under the National Electricity Plan, 2018, the target for scheduled generation capacity addition from conventional sources (coal, gas, nuclear) was about 50,000 MW for 2017-22.  However, the actual capacity added was only about 30,000 MW (59% of the set target).

• Installed capacity from renewable sources:  The Plan noted that India has significant potential of generation from renewable energy sources. Renewable energy is expected to contribute to about 35% of the energy mix by 2026-27 and rise to 44% by 2031-32.  Measures should be taken to attract private sector and more funds should be allocated to support research and development in the renewable sector.

• Required capacity addition:  The projected capacity addition requirement during 2027-32 to meet the peak demand for 2031-32 is about three lakh megawatts.

• Additional coal capacity:  Apart from the under-construction coal capacity of about 27,000 MW, the additional coal capacity required till 2031-32 may vary from 19,000 MW to 27,000 MW.

• Emissions:  The average CO₂ emission rate from coal-based stations has been declining indicating improvement in efficiency of generation from coal-based power plants.

Amendments to Green Energy Open Access Rules notified

Harshit Padia (harshit@prsindia.org)

The Ministry of Power notified the Electricity (Promoting Renewable Energy Through Green Energy Open Access) (Second Amendment) Rules, 2023.[33]  The Rules provide a framework for open access to renewable energy (from sources including solar, wind, hydro, and waste-to-energy).[34]  Open access means allowing a consumer to purchase electricity from a distribution company of its choice.  Only consumers with demand or sanctioned load of 100 kilowatt (kW) and above are eligible under this framework (except captive consumers).  The amendment adds such consumers will be required to have the demand or sanctioned load of 100 kW through: (i) a single connection, or (ii) multiple connections aggregating 100 kW or more located in the same electricity division of a distribution licensee.

Under the Rules, consumers with access to green energy (renewable sources) shall pay a cross subsidy surcharge as per the central government's tariff policy.  Cross subsidy refers to a tariff structure where a group of consumers pay relatively higher charges to cover the cost of supply to another group of consumers.   The Rules exempt green energy utilised for production of green hydrogen and green ammonia from cross subsidy and additional surcharge.   The amendment omits this and adds that an additional surcharge will not be applicable to electricity produced and supplied to open access consumers from offshore wind projects, which are commissioned up to 2032.

ISTS charges waived for offshore wind and green hydrogen/ammonia projects

Harshit Padia (harshit@prsindia.org)

The Ministry of Power notified complete waiver of inter-state transmission (ISTS) charges for 25 years for: (i) offshore wind power projects commissioned on or before December 31, 2032, and (ii) green hydrogen and green ammonia projects commissioned on or before December 31, 2032.[35]  The waiver will be available to only those green hydrogen and green ammonia projects which use renewable energy, pumped storage, or battery storage system.  Projects commissioned after the cut-off date for complete waiver will attract graded charges, ranging from 25% to 100% based on the date of commissioning.   Earlier, similar waiver was made available for solar, wind, hydro-based pump storage and battery storage system projects.[36]  The waiver for wind power projects was made available for projects commissioned on or before June 30, 2025.

The complete waiver of ISTS charges for Pump Storage Systems (PSP) has been linked to the date of award of project.  Earlier, it was linked to the commissioning date.  This change will be applicable for cases where construction work has been awarded on or before June 30, 2025.

For energy storage system projects, the complete waiver of ISTS charges has been made applicable at the user level.  Earlier, it was applicable at the project level.  The waiver will be available if at least 51% of the total energy utilised by a user for charging the storage system is renewable energy.

Reforms for the electricity sector recommended by a Group constituted by the Ministry of Power

Harshit Padia (harshit@prsindia.org)

The Ministry of Power announced that the group for ‘Development of Electricity Market in India’ (Chair: Alok Kumar, Secretary, Ministry of Power), submitted its report.  The group was constituted to recommend certain reforms for the development of the electricity market of India.[37]  The Ministry noted that the group has highlighted several issues in the power sector in India including: (i) dominance of inflexible long-term power purchase agreements, (ii) need for resource adequacy planning in centre and states, (iii) need to share increasing share of renewables in the overall energy mix, and (iv) encouraging market participation for renewables.  

Key recommendations made by the group include: (i) setting up a mechanism to monitor adequacy of supply by state utilities, (ii) implementing five-minute based metering, scheduling, dispatch, and settlement, (iii) introducing a market-based mechanism for secondary reserves.   Further, a regional level balancing framework for deviation management should be implemented for reducing deviation penalties for states at the inter-state transmission system level.   The report of the group is not available in the public domain.  

 

Health and Family Welfare 

Siddharth Mandrekar Rao (siddharth@prsindia.org)

Accessibility standards for healthcare facilities notified

The Ministry of Health and Family Welfare notified accessibility standards for hospitals and other healthcare institutions.[38]  The standards have been framed under the Rights of Persons with Disabilities, Act, 2016.[39]  Key features of the standards are the following:

• Outpatient facilities: The standards specify requirements for facilities used for outpatient services.  For example, forms should be made easily available for patients with hearing disabilities to request aid in communication, such as a sign language interpreter.

• Inpatient facilities:  The standards prescribe requirements for hospital wards, bathrooms, and other inpatient facilities.  For example, they prescribe requirements for the height adjustability of beds in hospital wards.  Evacuation facilities for emergencies should be capable of accommodating patients with all disabilities, including features such as wheelchair ramps and large signage.   Bathrooms in hospital wards should be wheelchair accessible, and equipped with grab bars and lever-based controls for taps and faucets.

• Medical equipment:  The standards also specify features necessary to make equipment more accessible to patients.  For example, patient examination rooms must allow clearance for wheelchairs, and other features such as grab bars for support.  Floor lifts should be available to help in moving and examining patients with locomotor disabilities.  Radiological diagnostic equipment such as MRI machines should provide clear visual and audio signals to patients.

Amendments to Cigarettes and Other Tobacco Products Rules, 2004 notified

The Ministry of Health and Family Welfare notified amendments to the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Rules, 2004.[40]^,[41]  The 2004 Rules place restrictions on the sale, production, and advertisement of tobacco products.  For example, they prohibit (i) the advertisement of tobacco products, and (ii) the sale of tobacco products within 100 yards of an educational institution or to a minor.[42]^,[43]  

The 2023 amendments require that anti-tobacco advertisements be displayed with online curated content that features the use of tobacco products.40  Online curated content refers to any curated audio-visual content made available on demand via a computer resource, such as OTT content.   Anti-tobacco advertisements of at least 30 seconds in duration must be displayed at the beginning and in the middle of any programme.  Audio-visual disclaimers of the ill-effects of tobacco consumption must also be displayed at the beginning and in the middle of online content.

Any tobacco use depicted in online content must be accompanied by a static anti-tobacco warning at the bottom of the screen.  The content of such warnings shall be provided on the website of the Ministry of Health and Family Welfare.  Publishers of online content failing to comply with this requirement will be issued a notice to show cause by an inter-ministerial committee.  This committee will consist of representatives of (i) the Ministry of Health and Family Welfare, (ii) the Ministry of Information and Broadcasting and (iii) The Ministry of Electronics and Information Technology.

Draft amendments to New Drugs and Clinical Trials Rules, 2019, released

The Ministry of Health and Family Welfare released draft amendments to the New Drugs and Clinical Trials Rules, 2019.[44]   They have been framed under the Drugs and Cosmetics Act, 1940.[45]  The 2019 Rules specify the procedure for conducting clinical trials.  Clinical trials are studies of the efficacy and safety of new drugs or research on potential new drugs.  The 2019 Rules specify procedural details such as obtaining informed consent of participants and the oversight of trials by an ethics committee. 

The draft amendments define Clinical Research Organisations to be bodies that conduct some or all parts of a clinical trial on behalf of a sponsor, which is the entity initiating and managing the trial.   The draft amendments add a chapter pertaining to the functioning of Clinical Research Organisations.  For example, they are required to register with the Drugs Controller of India, and such registration is valid for five years.  Clinical Research Organisations are subject to inspections, and must maintain records and data regarding the conduct of trials.   The registration can be cancelled if the Clinical Research Organisation fails to comply with the Act or Rules.

Draft amendments to Cosmetics Rules, 2020, released

The Ministry of Health and Family Welfare invited comments on draft amendments to the Cosmetics Rules, 2020.[46]  The 2020 Rules specify the procedure for obtaining licenses to import or manufacture cosmetics, prescribe standards for cosmetics and procedures for testing and certifying compliance.[47]   They have been framed under the Drugs and Cosmetics Act, 1940.[48]  

Cancellation and suspension of license: Under the 2020 Rules, State Licensing Authorities are responsible for granting licenses for manufacturing or distributing cosmetics.  The draft amendments add a provision enabling the State Licensing Authority to cancel or suspend licenses issued under the rules.   This provision requires licensees to be given a fair opportunity to show cause before cancellation/suspension.   Licensees whose licenses have been suspended or cancelled may appeal this decision within three months, after which it will become final.

Central Cosmetics Laboratory: The 2020 Rules provide for a Central Cosmetics Laboratory to test cosmetics suspected to be prohibited under the Act.  The draft amendment designates the Central Drugs Laboratory as the Central Cosmetics Laboratory.    

The draft amendments will be taken into consideration on or after June 29, 2023.

 

Civil Aviation

Tanvi Vipra (tanvi@prsindia.org)

Draft Aircraft Bill, 2023 released for public feedback

The Ministry of Civil Aviation released the Draft Aircraft Bill, 2023 for public consultation.[49]  The Bill seeks to replace the Aircraft Act, 1934.[50]  As per the Ministry, the proposed Bill seeks to meet the current needs of aviation regulation and specifies provisions in a simplified manner.  The draft Bill includes identical provisions with respect to: (i) constituting bodies such as the Directorate General of Civil Aviation (DGCA) and the Bureau of Civil Aviation Security (BCAS), (ii) regulating construction of buildings or trees near airports, and (iii) emergency powers of the central government to protect public health.

Key changes proposed in the draft Bill include:

• Applicability: Under the Act, the definition of aircraft includes machines supported by atmospheric reactions in the air.  It also includes fixed/free balloons, airships, kites, gliders, and flying machines.   The draft Bill removes fixed/free balloons, airships, kites, gliders, and flying machines from the definition of aircraft.

• Rule-making powers of central government: In addition to the general rule-making powers of the central government, the Act empowers the central government to make rules on specific matters.  These include regulation of airfares, aircraft registration, and carriage of substances.  The Draft Bills seeks to expand these to include: (i) security oversight, (ii) scope of oversight functions of the DGCA and BCAS, and (iii) issuance of radio telephone operator certificates and aircraft maintenance licenses.

• Appeal against imposition of penalties: Under the Act, if any person is aggrieved with the penalty imposed by an officer, they may appeal to a higher-ranking officer.  The Draft Bills provides additional levels of appeal in case of dissatisfaction with the order of the appellate officer.  The central government shall be the final appellate authority.

Comments on the Draft Bill are invited until June 30, 2023.

UDAN 5.1 for helicopter routes launched

The Ministry of Civil Aviation launched round 5.1 of the Regional Connectivity Scheme (RCS) – Ude Desh ka Aam Nagrik (UDAN).[51]  The Scheme seeks to enhance connectivity to remote areas of the country and achieve last mile connectivity through helicopters.  The Scheme seeks to facilitate regional air connectivity by making it affordable.  Previous rounds of the Scheme provided viability gap funding for airlines and capped airfare for flights operating on specified routes.  Previously, routes were allowed when both the origin and destination locations were in priority areas.  

Key features of the UDAN 5.1 include: (i) expansion of operational scope by allowing routes with either the source or destination being the priority area location, (ii) reduction in helicopter airfare caps by 25%, and (iii) an increase in viability gap funding caps for single and twin-engine helicopters. As per the Ministry, greater helicopter use will help boost tourism, hospitality, and local economies.  As of May 2023, 46 helicopter routes have been operationalised under previous rounds of the Scheme.  

Draft notification released to amend pilot license requirements for defence personnel 

The Directorate General of Civil Aviation released a draft amendment to Civil Aviation Requirements Notification under the Aircraft Rules, 1937.[52],[53]  It specifies flight crew standards, training and licensing requirements.  As per the Aircraft Rules 1937, qualified pilots from the Indian Air Force, Navy, Army or Coast Guard who possess the necessary flying experience and competency may be exempted from flying tests required for commercial and transport licenses.  They are required to submit documentary evidence demonstrating such competency and pass written examinations.  It also removes the flying experience exemption.  Consequently, defence applicants will be required to pass a technical examination and demonstrate their competency on an aircraft or simulator at an approved training organisation.

 

Agriculture

Tanvi Vipra (tanvi@prsindia.org)

Cabinet approved revision in fertiliser subsidy

The Union Cabinet approved the revision in nutrient based fertiliser subsidy rates for Rabi 2022-23 and fixed subsidy rates for Kharif 2023.[54]   Revised rates under the nutrient based subsidy scheme will be effective between January 1, 2023 and March 31, 2023 for Rabi crops and between April 1, 2023 and September 30, 2023 for Kharif crops.   Subsidy of Rs 38,000 crore will be provided for Kharif 2023.  The Union Budget 2023 estimated the expenditure on fertiliser subsidy at Rs 1,75,100 crore in 2023-24.    
 

Food and Public Distribution

Tanvi Vipra (tanvi@prsindia.org)

Cabinet approves constitution of Inter-Ministerial Committee for grain storage

The Union Cabinet approved the constitution of an Inter-Ministerial Committee to facilitate creating the World’s Largest Grain Storage Plan in the Cooperative Sector.[55]   Eight schemes under the Ministry of Agriculture and Farmers Welfare, Ministry of Consumer Affairs Food and Public Distribution, and Ministry of Food Processing Industries will be converged for this purpose.  

The Committee will address the shortage of agricultural storage infrastructure by facilitating the establishment of godowns and processing units at the level of Primary Agriculture Credit Societies (PACS).   The Committee will be empowered to modify (within approved outlays) guidelines/ implementation methodologies for such schemes to create infrastructure at selected viable PACS.   PACS will carry out additional activities such as functioning as procurement centres for Food Corporation of India or state agencies and serving as fair price shops.

Decentralised storage capacity at the local level is expected to reduce food grain wastage. Further, providing options to farmers is expected to prevent distress sale of crops, and reduce the transportation costs.  Implementation of the proposal will begin within 45 days of Cabinet approval.

 

External Affairs

Alaya Purewal (alaya@prsindia.org)

Quad Health Security Partnership announced

The 2023 Quad Leaders’ Summit issued a joint statement launching the Quad Health Security Partnership.[56]  The Quad is a diplomatic network of the four countries committed to supporting an open, stable, and prosperous Indo-Pacific.[57]  It consists of India, the United States of America, Japan, and Australia.  The Quad Leaders’ Summit is attended by heads of government.  The new partnership is an expansion of the Quad Vaccine Partnership, launched in 2021.[58]  The vaccine partnership planned to enhance equitable access to vaccines in the Indo-Pacific region.[59]  The new partnership will strengthen coordination and collaboration in support of health security in the Indo-Pacific.  The partnership plans to implement activities to build the region’s capacity to detect and respond to outbreaks of epidemic diseases.  These activities include: (i) disease surveillance, (ii) coordination of outbreak response, and (iii) developing and supporting the health workforce.